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|15 May, 2019

Wednesday outlook: Oil prices retreat on rising U.S. supplies

Brent crude futures were at $70.90 a barrel at 0100 GMT, down 34 cents, or 0.5%, from their last close

An investor looks at stock information in front of an electronic display board at the Dubai International Financial Market March 21, 2010.

An investor looks at stock information in front of an electronic display board at the Dubai International Financial Market March 21, 2010.

REUTERS/Ahmed Jadallah
  • Data shows rise in U.S. crude stockpiles
  • Trump comments boost global markets
  • Dubai’s index rebounds, outperforms region
  • Dollar steadies, gold edges higher

Oil prices

Oil prices dropped on Wednesday as United States crude stockpiles unexpectedly rose last week, data from industry group the American Petroleum Institute showed on Tuesday.

Brent crude futures were at $70.90 a barrel at 0100 GMT, down 34 cents, or 0.5%, from their last close. Brent closed up 1.4% on Tuesday.

U.S. West Texas Intermediate (WTI) crude futures were at $61.39 per barrel, down 39 cents, or 0.6%, from their previous settlement. WTI closed up 1.2% in the previous session.

Global markets

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Asian shares rebounded on Wednesday on comments from the U.S. President Donald Trump.

Trump on Tuesday said he had a “very good” dialogue with China and insisted talks between the world’s two largest economies had not collapsed.

MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.5%. Wall Street shares were able to bounce overnight in wake of Trump’s comments.

Data showed that growth in China’s industrial output slowed in April, while the increase in retail sales missed forecasts.

“The latest data shows that the Chinese economy still needs stimulus. Its stock markets could sustain its recovery if the government indicates it will continue to keep supporting the economy,” Hirayama at SMBC Nikko Securities told Reuters.

Middle East markets

Dubai’s index rebounded on Tuesday, adding 3.5 percent. Emaar Properties added 5 percent, Emaar Malls was up 13.8%, while Emaar Development gained 8%, as MSCI maintained its decision to keep the two real estate firms in the standard index.

Abu Dhabi's index fell 2.6% as First Abu Dhabi Bank, the largest bank in the United Arab Emirates, dropped 8.6% after index provider MSCI decided against increasing FAB's foreign inclusion factor.

Saudi Arabia’s index edged up 0.1 percent. Al Alamiya and Al Baha Investment and Development tumbled 9.8% and 8.8%, respectively, while heavyweights Riyad Bank slipped 2% and Saudi Telecom fell 2.2%.

Egypt's blue-chip index, was up 0.9% with Cairo For Investment and Real Estate Development adding 3.6%.

Qatar’s index gained 0.6 percent, Kuwait’s premier market index dropped 1.3 percent, Bahrain’s index fell 0.5 percent and Oman’s index dropped 0.3 percent.

Currencies

The dollar was mainly unchanged early on Wednesday.

The dollar index, which measures the greenback against a basket of six major currencies, was steady at 97.542.

Precious metals

Gold prices edged lower in early trading.

Spot gold fell 0.1% to $1,295.54 per ounce by 0313 GMT.

U.S. gold futures were steady at $1,296.10 an ounce.

(Reporting by Gerard Aoun; Editing by Mily Chakrabarty)

(gerard.aoun@refinitiv.com)


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